Employers Must Act Now! Emergency Paid Family and Sick Leave
March 20, 2020
Employers must prepare to act soon, to assure their compliance with the historic emergency paid family and sick leave obligations passed into law this week. The Families First Coronavirus Response Act is effective on April 2, 2020 and is currently scheduled to last through December 31, 2020. It is the first of an anticipated series of laws created in direct response to the novel coronavirus (“COVID-19”) outbreak and its devastating impact on employees in the private sector. While passed as one law, the benefits from the Act are two-fold, as it provides both new paid sick leave for employees and expands the FMLA to now provide paid family leave to most employees so as to allow them to care for their children due to childcare and school closures related to COVID-19.
“New” Federal Paid Sick Leave
- At least through the end of 2020, the Act requires private employers with fewer than 500 employees to provide their eligible full- time employees with up to 80 hours of paid sick leave. Part-time employees are eligible for a proportionate amount of leave based on average number of hours worked over two weeks for the six months prior to taking paid sick leave. The Act appears to allow employers who are already providing sick leave to cover the COVID-19 absences described in the Act to apply their existing sick leave to fulfill this mandate. [More on this when we get confirmation-one way or another.]
- Employees are eligible for paid sick leave regardless of their length of employment (i.e., no “time-served” thresholds apply).
- Employees should be compensated at their regular rate or the applicable federal, state, or local minimum wage, whichever is higher. However, sick-leave pay is capped at $511 per day (and up to $5,110 in total) per employee for an employee’s own health-related absence, and $200 per day (and up to $2,000 in total) per employee for caring for others (typically an ill family member or child without daycare or school as a result of COVID-19).
- Eligible employees may use the paid sick leave if:
- required to comply with a federal, state or local quarantine or isolation order related to COVID-19;
- advised to self-quarantine by a health care provider due to COVID-19 related concerns;
- experiencing symptoms of COVID-19 and seeking a medical diagnosis from a healthcare provider;
- caring for their child if the child’s place of care or school is closed or the childcare provider is unavailable due to a COVID-19 public health emergency;
- caring for an individual required to comply with a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to a COVID-19 public health emergency; or
- experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
- Employers will be required to post notice of the emergency paid sick leave requirements made available under H.R. 6201.
- Employers must also post notice of the emergency paid sick leave benefits. The U.S. Department of Labor is tasked with creating and releasing a model notice poster for employers to use by March 25, 2020.
Expansion of FMLA for COVID-19
- The Act also temporarily expands FMLA by requiring private employers with fewer than 500 employees to allow their eligible employees who are unable to work (or telework) to take up to 12 weeks of paid family medical leave to care for their son or daughter if the child’s place of care or school is closed or the childcare provider is unavailable due to a COVID-19 public health emergency.
- Employees are eligible for this leave if they have worked for the employer for at least 30 days prior to the designated leave.
- By law, the first 10 days of this leave may be unpaid. However, an employee may elect to use the paid sick leave described above or substitute any accrued: (i) vacation/PTO, (ii) personal leave, or (iii) other medical/sick leave in lieu of some or all of these initial 10 days of unpaid leave. Subsequently, leave needed beyond 10 days as a result of a place of care or school closure must be paid at 2/3 the employee’s regular rate of pay. This new paid FMLA leave is capped of $200 per day (and up to $10,000 total).
- FMLA generally requires that an employee be restored to the same or equivalent position after leave. Under this new law, that requirement does not apply to employers with fewer than 25 employees if the employee’s position no longer exists due to changes in the employer’s operating or economic conditions that affect employment and are caused by the COVID-19 public health emergency. For this exclusion to apply, an employer must: (a) make reasonable efforts to restore the employee to an equivalent position, and (b) make reasonable efforts to return the employee to work for up to a year following the employee’s leave.
The Act included language which allows the U.S. Department of Labor to release subsequent regulations to exempt small businesses with fewer than 50 employees when the provision would impact the viability of the business, and healthcare providers or emergency responders at their election. No mandate is given to DOL in this regard, rather, the door is left open should this new required paid leave, itself, threaten the very existence of small businesses.
Payroll Tax Credit for Employers
- Employers are eligible to receive a 100% payroll tax credit for these costs related to providing the leave above.
- The payroll tax credit is limited to the paid sick leave and paid FMLA leave caps stated above. Additionally, the credit is refundable if it exceeds the amount the employer owes in payroll tax.
Please contact us if you have any questions regarding the Act, whether you are required to provide related leave, or would like to discuss this topic further.
The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the Shulman Rogers Employment and Labor Law Group.